arXiv subjects

Huseyin Topaloglu

Publications and source records attributed to Huseyin Topaloglu.

9 recordsLinked to original sources

arXiv2026

Joint Inventory Placement, Assortment Personalization, and Order Fulfillment for Substitutable Products

Modern online retailers leverage networks of distributed warehouses to rapidly fulfill customer orders. We study a problem of jointly deciding (i) how to allocate inventories across warehouses in the network subject to warehouse capacity and product supply constraints, (ii) how to dynamically select personalized product assortments based on customer preferences and location, as well as real-time stock levels, and (iii) which warehouse to use to fulfill the product chosen by the customer to maximize expected profit. In our model, the firm chooses an inventory placement across warehouses at the start of the selling horizon. Customers of different types then arrive at discrete time periods over a finite time horizon according to a known distribution. When offered an assortment, each customer type chooses at most one product according to a discrete choice model. The firm then chooses a feasible warehouse from which to fulfill the chosen product, depleting its stock and earning a profit that depends on the product, customer type, and warehouse choice. We develop approximation algorithms and policies with provable theoretical guarantees and strong empirical performance. Under general probabilistic choice models, we establish asymptotically optimal approximation algorithms as warehouse capacities and product supplies scale. Under the multinomial logit (MNL) choice model, we obtain constant-factor approximation algorithms, with approximation factors ranging from 0.080 in the most general setting to 0.199 under stationarity and unlimited product supplies, which means that only warehouse capacity constraints are present. To the best of our knowledge, these results provide the first provably efficient algorithms for the joint inventory placement, assortment personalization, and order fulfillment problem.

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arXiv2026

Killing the Case for Randomization in Dynamic Assortment Optimization

One of the traditional approaches for constructing approximate policies for dynamic assortment optimization problems is to use sampling-based inventory-agnostic policies. Such policies are called sampling-based, as they sample an assortment of products from a fixed distribution at each time period to offer to a customer of each type. Such policies are called inventory-agnostic, as the sampled assortments may include products without remaining inventories, so if a customer chooses a product without remaining inventories, then she leaves without a purchase. Inventory-agnostic nature of a policy is not a concern, because it is known that if the policy samples an assortment that includes products without remaining inventories, then dropping the products without remaining inventories does not degrade the performance. However, sampling-based nature of a policy is a concern, because sampling brings another source of uncertainty in the performance. In this paper, we give an algorithm to de-randomize any sampling-based inventory-agnostic policy, so the de-randomized policy offers a deterministic sequence of assortments within the support of the original policy without degrading the performance. Furthermore, we give a variation of our de-randomization algorithm that searches for a deterministic sequence of assortments beyond the support of the original policy. We show that we can implement the latter variation efficiently as long as we can solve the static assortment optimization problem under the choice model governing the choice process of the customers. As our crowning technical contribution, we study locally-optimal deterministic policies, where changing any single one of the assortments in the policy does not improve the total expected revenue. We show that any locally-optimal policy has a performance guarantee of 1/2 - epsilon when compared with the best sampling-based policy.

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arXiv2025

Optimal Selection with Balanced Market Share: Static and Dynamic Assortment Optimization

Assortment optimization is a critical tool for online retailers aiming to maximize revenue. However, optimizing purely for revenue can lead to unbalanced sales across products, potentially causing a long tail of low-selling products and products with excessively large market shares, both of which could be harmful to the seller. To address these issues, we introduce a market share balancing constraint that limits the disparity in expected sales between any two offered products to a factor of a given parameter $\alpha$. We study both static and dynamic assortment optimization under the multinomial logit (MNL) model with this fairness constraint. In the static setting, the seller selects a distribution over assortments that satisfies the market share balancing constraint while maximizing expected revenue. We show that this problem can be solved in polynomial time, and we characterize the structure of the optimal solution: a product is included if and only if its revenue and preference weight exceed certain thresholds. We further extend our analysis to settings with additional feasibility constraints on the assortment and demonstrate that, given a $\beta$-approximation oracle for the constrained problem, we can construct a $\beta$-approximation algorithm under the fairness constraint. In the dynamic setting, each product has a finite initial inventory, and the seller implements a dynamic policy to maximize total expected revenue while respecting both inventory limits and the market share balancing constraint in expectation. We design a policy that is asymptotically optimal, with its approximation ratio converging to one as inventories grow large.

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arXiv2024

Online Allocation of Throughput-Constrained Resources Using Proxy Assignments

We study a variation of the canonical online resource allocation problem in which resources are throughput, rather than budget, constrained. As in the classical setting, the decision-maker must assign sequentially arriving jobs to one of multiple available resources. However, in addition to the assignment costs incurred from these decisions, the decision-maker is also penalized for deviating from exogenous, time-varying target assignment rates for each resource, which represent the resources' respective throughput capacities throughout the horizon. The goal is to minimize the total expected assignment and deviation penalty costs incurred throughout the horizon when the distribution of assignment costs is unknown. We first show that naive extensions of state-of-the-art algorithms for classical budget-constrained resource allocation problems can fail dramatically when applied to throughput-constrained resource allocation. We then propose a novel ``proxy assignment" primal-dual algorithm that uses current arrivals to simulate the effect of future arrivals. We prove that our algorithm achieves the optimal $O(\sqrt{T})$ regret bound when the assignment costs of the arriving jobs are drawn i.i.d. from a fixed distribution. We demonstrate the practical performance of our approach by conducting numerical experiments on synthetic datasets, as well as real-world datasets from retail fulfillment operations.

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arXiv2024

Assortment Optimization under the Multinomial Logit Model with Covering Constraints

We consider an assortment optimization problem under the multinomial logit choice model with general covering constraints. In this problem, the seller offers an assortment that should contain a minimum number of products from multiple categories. We refer to these constraints as covering constraints. Such constraints are common in practice due to service level agreements with suppliers or diversity considerations within the assortment. We consider both the deterministic version, where the seller decides on a single assortment, and the randomized version, where they choose a distribution over assortments. In the deterministic case, we provide a $1/(\log K+2)$-approximation algorithm, where $K$ is the number of product categories, matching the problem's hardness up to a constant factor. For the randomized setting, we show that the problem is solvable in polynomial time via an equivalent linear program. We also extend our analysis to multi-segment assortment optimization with covering constraints, where there are $m$ customer segments, and an assortment is offered to each. In the randomized setting, the problem remains polynomially solvable. In the deterministic setting, we design a $(1 - \epsilon) / (\log K + 2)$-approximation algorithm for constant $m$ and a $1 / (m (\log K + 2))$-approximation for general $m$, which matches the hardness up to a logarithmic factor. Finally, we conduct a numerical experiment using real data from an online electronics store, categorizing products by price range and brand. Our findings demonstrate that, in practice, it is feasible to enforce a minimum number of representatives from each category while incurring a relatively small revenue loss. Moreover, we observe that the optimal expected revenue in both deterministic and randomized settings is often comparable, and the optimal solution in the randomized setting typically involves only a few assortments.

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arXiv2024

Revenue Management with Calendar-Aware and Dependent Demands: Asymptotically Tight Fluid Approximations

When modeling the demand in revenue management systems, a natural approach is to focus on a canonical interval of time, such as a week, so that we forecast the demand over each week in the selling horizon. Ideally, we would like to use random variables with general distributions to model the demand over each week. The current demand can give a signal for the future demand, so we also would like to capture the dependence between the demands over different weeks. Prevalent demand models in the literature, which are based on a discrete-time approximation to a Poisson process, are not compatible with these needs. In this paper, we focus on revenue management models that are compatible with a natural approach for forecasting the demand. Building such models through dynamic programming is not difficult. We divide the selling horizon into multiple stages, each stage being a canonical interval of time on the calendar. We have random number of customer arrivals in each stage, whose distribution is arbitrary and depends on the number of arrivals in the previous stage. The question we seek to answer is the form of the corresponding fluid approximation. We give the correct fluid approximation in the sense that it yields asymptotically optimal policies. The form of our fluid approximation is surprising as its constraints use expected capacity consumption of a resource up to a certain time period, conditional on the demand in the stage just before the time period in question. As the resource capacities and number of stages increase with the same rate, our performance guarantee converges to one. To our knowledge, this result gives the first asymptotically optimal policy under dependent demands with arbitrary distributions. Our computational experiments indicate that using the correct fluid approximation can make a dramatic impact in practice.

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arXiv2020

Future Evolution of COVID-19 Pandemic in North Carolina: Can We Flatten the Curve?

On June 24th, Governor Cooper announced that North Carolina will not be moving into Phase 3 of its reopening process at least until July 17th. Given the recent increases in daily positive cases and hospitalizations, this decision was not surprising. However, given the political and economic pressures which are forcing the state to reopen, it is not clear what actions will help North Carolina to avoid the worst. We use a compartmentalized model to study the effects of social distancing measures and testing capacity combined with contact tracing on the evolution of the pandemic in North Carolina until the end of the year. We find that going back to restrictions that were in place during Phase 1 will slow down the spread but if the state wants to continue to reopen or at least remain in Phase 2 or Phase 3 it needs to significantly expand its testing and contact tracing capacity. Even under our best-case scenario of high contact tracing effectiveness, the number of contact tracers the state currently employs is inadequate.

q-bio.PE↗

arXiv2020

Can Testing Ease Social Distancing Measures? Future Evolution of COVID-19 in NYC

The "New York State on Pause" executive order came into effect on March 22 with the goal of ensuring adequate social distancing to alleviate the spread of COVID-19. Pause will remain effective in New York City in some form until early June. We use a compartmentalized model to study the effects of testing capacity and social distancing measures on the evolution of the pandemic in the "post-Pause" period in the City. We find that testing capacity must increase dramatically if it is to counterbalance even relatively small relaxations in social distancing measures in the immediate post-Pause period. In particular, if the City performs 20,000 tests per day and relaxes the social distancing measures to the pre-Pause norms, then the total number of deaths by the end of September can reach 250,000. By keeping the social distancing measures to somewhere halfway between the pre- and in-Pause norms and performing 100,000 tests per day, the total number of deaths by the end of September can be kept at around 27,000. Going back to the pre-Pause social distancing norms quickly must be accompanied by an exorbitant testing capacity, if one is to suppress excessive deaths. If the City is to go back to the "pre-Pause" social distancing norms in the immediate post-Pause period and keep the total number of deaths by the end of September at around 35,000, then it should be performing 500,000 tests per day. Our findings have important implications on the magnitude of the testing capacity the City needs as it relaxes the social distancing measures to reopen its economy.

q-bio.PE↗

arXiv2013

Dynamic Service Rate Control for a Single Server Queue with Markov Modulated Arrivals

We consider the problem of service rate control of a single server queueing system with a finite-state Markov-modulated Poisson arrival process. We show that the optimal service rate is non-decreasing in the number of customers in the system; higher congestion rates warrant higher service rates. On the contrary, however, we show that the optimal service rate is not necessarily monotone in the current arrival rate. If the modulating process satisfies a stochastic monotonicity property the monotonicity is recovered. We examine several heuristics and show where heuristics are reasonable substitutes for the optimal control. None of the heuristics perform well in all the regimes. Secondly, we discuss when the Markov-modulated Poisson process with service rate control can act as a heuristic itself to approximate the control of a system with a periodic non-homogeneous Poisson arrival process. Not only is the current model of interest in the control of Internet or mobile networks with bursty traffic, but it is also useful in providing a tractable alternative for the control of service centers with non-stationary arrival rates.

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